In order to expand his men's shoe business, Mohammed Jizani had to borrow $100,000 from a loan shark. As is common in such cases, he was forced to pay the lender $4,000 a month in interest until the final payment on his debt.
Jizani, who owns four shops in Baghdad, imports most of the goods he sells from Turkey. He tried to get a loan from local banks, but lacked sufficient collateral. Even the feasibility study he prepared to outline the profits he expected from his business proved useless.
"Dealing with the usurer is easy," he said sarcastically, "while banks do not seem to be interested in small business expansion.”
Al-Monitor found out that the Iraqi moneylender Jizani dealt with owns a foreign exchange office in the Jamila area, east of Baghdad. He lends money to merchants like Jizani and has developed relationships with owners of small factories that produce foodstuffs as well as wholesale food stores.
Charging excessive interest, called "riba" in Arabic, is prohibited as a sin under Islamic law. But Jizani, a practicing Muslim, said a lack of liquidity can lead otherwise dedicated Muslims to make deals with predatory lenders.
Such was the case with Ahmed Jabbar of Baghdad. Extended unemployment led Jabbar to buy a taxicab with money from such a lender. But he said he believes the money he borrowed does not constitute an act of riba. He told Al-Monitor, “I took from one of the operators $10,000 and I will pay them back in Iraqi dinars with an interest amount equivalent to about $3,000.”